Mortgage payment reducion

Options
alanwearing
alanwearing Posts: 7 Forumite
in Debt-free wannabe
Hi I have a mortgage with Nationwide that has 5 years left to run. I owe £9000, my regular payments are £274 but can overpay. I want to retire in a year and would like to use my cash to build a reserve for retirement.

The question is can i reduce my payments to a minimum amount to enable me to build cash for my retirement.


Kind Regards
Alan

Comments

  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
    First Anniversary Photogenic Name Dropper First Post
    Options
    Your mortgage payments are already set at the minimum amount.
  • System
    System Posts: 178,094 Community Admin
    Photogenic Name Dropper First Post
    Options
    You can extend your term to reduce payments, however it wouldn't be economic really. At Nationwide, I'm sure you can overpay by 10% of the balance, so an extra £900 this year etc. You can probably get that mortgage completely done in two years...then you are free and clear !
  • DawnW
    DawnW Posts: 7,440 Forumite
    Name Dropper Photogenic First Post First Anniversary
    Options
    OP, have you been overpaying your mortgage? If so, you might be able to ask for a payment 'holiday'? Other than that, you could possibly increase the term (length) of your mortgage - if the company would allow this a) for such a small amount, and b) if they could be certain you could continue to pay into retirement. Thinking about it, are you on the best possible rate? It might be worth ringing them up and asking that in the first instance.

    Do you have any other debt? A SOA might be helpful as you give very little information.

    I paid off my mortgage way before the end of its term, literally threw every possible penny at it, to enable me to retire early. As my pension was not great, and was actuarily reduced anyway due to early retirement, I would have struggled to keep up with the payments had I not blitzed it prior to taking retirement.
  • alanwearing
    alanwearing Posts: 7 Forumite
    Options
    Hi Thanks for the replies Here is an update of my financial position
    I have £65000 savings and private pensions of £400 per month.
    I have no debt other than the £9000 mortgage. I work for the NHS (Alder hey hospital) as a health care assistant. I have worked there 8.5 years and will recieve a small pension at 65, however my stste pension can not be drawn until 66.



    Thanks
  • macman
    macman Posts: 53,098 Forumite
    Name Dropper First Post First Anniversary
    edited 17 August 2018 at 11:43AM
    Options
    Unless the rate you are getting on your savings is more than you are paying on your mortgage, then overpay as much as you can to clear your mortgage. It'a a no-brainer.
    Why would you want to reduce your payments or extend the mortgage term now, when you know that your income will drop steeply in a year?
    Worst case is that you might have to dip into your savings post retirement for a while until your state pension kicks in. Or you could carry on working until it does?
    Doing what you suggest is not 'building cash', it's just delaying debt repayment and costing you more in interest long term.
    No free lunch, and no free laptop ;)
  • DawnW
    DawnW Posts: 7,440 Forumite
    Name Dropper Photogenic First Post First Anniversary
    Options
    I would pay the mortgage off from savings, get rid of it, it is a great feeling! You will soon build up your savings again once it has gone!
  • tallyhoh
    tallyhoh Posts: 2,305 Forumite
    First Post First Anniversary
    Options
    DawnW wrote: »
    I would pay the mortgage off from savings, get rid of it, it is a great feeling! You will soon build up your savings again once it has gone!


    I second that, just clear it :D
    Tallyhoh! Stopped Smoking October 2000. Saved £29382.50 so far!
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

Categories

  • All Categories
  • 343.3K Banking & Borrowing
  • 250.1K Reduce Debt & Boost Income
  • 449.7K Spending & Discounts
  • 235.3K Work, Benefits & Business
  • 608.1K Mortgages, Homes & Bills
  • 173.1K Life & Family
  • 248K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards